Tesla mulling potential acquisition of lithium miner Sigma Lithium: Report

Tesla has not been quiet about the need for additional lithium mining operations to satisfy the need for the growing electric vehicle (EV) market. CEO Elon Musk has even suggested the automaker may have to “get into the mining and refining” of the EV battery ingredient. If a new report is true, Tesla has been looking into doing just that with a potential acquisition of Sigma Lithium Corp.

According to sources familiar with the discussions that spoke with Bloomberg, Tesla has engaged with advisors on a potential bid for the lithium miner. The sources noted that discussions were still in a preliminary stage and that a deal is far from certain, adding that Tesla is also looking at other mining operations, not just Sigma Lithium.

A potential deal with Sigma makes sense as the company’s largest shareholder, A10 Investimentos from Brazil, has been actively gauging interest from other miners and automakers about purchasing the company. However, shares of Sigma have tripled in the past 12 months, making any bid more expensive and less attractive to potential suitors.

Sigma is currently engaged in developing a large lithium rock deposit in Brazil. Part of the reason for the surge in the company’s stock price is the high expectations being set by the owners, who in December said the mine had 63% more lithium than originally thought, and were considering tripling lithium production in 2024 as a result.

Sigma Lithium (SGML) is listed on the Toronto stock exchange (TSX) and is currently trading at around CAD$40 per share, giving it a market capitalization of CAD$4.2 billion. After news of the potential acquisition emerged, shares surged even higher in after-hours trading, up more than 26%.

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